LMND · Forward model · Car · Bear case
What has to happen in Car
Model as of
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Car
The line management is pushing hardest and the one that has to work for the story to change shape. $239M of in-force premium, up 59% year over year, at $2,089 a policy - nine times a renters policy, so a single car customer is worth more than eight renters. Lemonade is adding states rather than saturating them, and it says growth spend will rise sequentially behind Car. The gross loss ratio has gone from 88% to 61% in six quarters and the LAE ratio hit a record low 7% - management's cleanest evidence that AI claims handling works on the hardest line.
Latest: $192M (2031Q2E)
| Period | Value |
|---|---|
| 2024Q3 | $13M |
| 2024Q4 | $13M |
| 2025Q1 | $14M |
| 2025Q2 | $16M |
| 2025Q3 | $20M |
| 2025Q4 | $27M |
| 2026Q1 | $34M |
| 2026Q2 | $42M |
| 2026Q3E | $46M |
| 2026Q4E | $51M |
| 2027Q1E | $57M |
| 2027Q2E | $62M |
| 2027Q3E | $68M |
| 2027Q4E | $75M |
| 2028Q1E | $82M |
| 2028Q2E | $89M |
| 2028Q3E | $96M |
| 2028Q4E | $104M |
| 2029Q1E | $112M |
| 2029Q2E | $120M |
| 2029Q3E | $128M |
| 2029Q4E | $137M |
| 2030Q1E | $146M |
| 2030Q2E | $155M |
| 2030Q3E | $164M |
| 2030Q4E | $173M |
| 2031Q1E | $183M |
| 2031Q2E | $192M |
Assumptions & reasoning
- Nine times the premium of a renters policy and the fastest grower, but only 114,409 policies. Car is a state-by-state licensing rollout, not a saturation story, so the constraint is regulatory footprint and growth spend rather than demand.
- The loss ratio is volatile in a way the others are not: 88%, 82%, 76%, 40%, 74%, 61%. That 40% quarter was prior-period development, not a step change, and the model uses the basis quarter rather than the best one.
- Management said growth spend rises sequentially in the third quarter behind Car and seasonal renters strength, so the near-term cost of this line's growth sits in the corporate layer, not here.
- The terminal margin on this line is NOT purely underwriting. It is a seasoned loss ratio plus about 27 points that stand for Lemonade's fixed cost base being spread across a larger book. The engine holds sales and marketing, technology and general and administrative at a constant 52.65% of revenue, so operating leverage - the entire profitability thesis - has nowhere else to live. Read the basis margin as disclosed economics and the terminal margin as economics plus an assumption.